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Imagine if Dathon was actually this articulate but he was just trying to teach Picard a lesson.
I think half of the episode is the Tamarians genuinely struggling with human language. If the federations translation software wasn't up to the task, it isn't surprising that the Tamarian's software wasn't up for it either.
Based on the episode, it was posibly the first time Tamarians ever had friendly and successful first contact. Because if they had it previously, they might have asked for help translating when meeting new races such as with the Federation. The episode would have went a lot different if they had an Adorian ambassador with them saying "Yeah these guys talk in metaphor and only metaphor".